Lies, Damn Lies and Statistics

If you want to know why the unemployment rate is one of the worst indicators of the health of the economy, here is proof.

The government just released the numbers for November and a total of 120,000 jobs were created. That sounds good except that just to keep pace with population growth our economy needs to create 90,000 jobs a month.

Despite this tepid number, the unemployment rate dropped 0.4 to 8.6%. To accomplish this little trick, the government reduced the labor participation rate by 0.2 from 64.2% to 64.0% This effectively means that they said that .2% of the population was no longer looking for work (or put on permanent unemployment). That's a magical reduction of nearly 300,000 people from the workforce in one month.

Of course, all people will hear is that unemployment is now in the 8% range and that we've turned the economic corner. B******. Just five years ago (Dec. 2006), the labor participation rate was 66.4. In five years that a loss of over 3.3 million jobs before you even get to the change in unemployment rate.

Something stinks over the Bureau of Labor Statistics. Or maybe they're just living up to the old adage about statistics.